A new quality assurance methodology focused on patient outcomes will be developed for nursing homes in Massachusetts. The project will reflect the current priority in health services for establishing quality assurance systems based on patient outcomes. The project will contribute to mounting efforts to identify valid facility-level health outcome measures for nursing homes, a field in which attention to health outcomes measures is relatively new. The project will be a first step in creating an analytic research file and analytic framework that can be used on a continuing basis to improve the quality of nursing home care in Massachusetts. The major findings and much of the methodology will be generalizable to other states. Project activities will include: 1) development of an analytic research file based on the state's case mix reimbursement system that permits patient and facility-level trend analysis on patient characteristics, services, and health outcomes; 2) execution of a series of longitudinal studies based on the data; 3) development of a set of facility-level scores of health quality outcomes adjusted for patient characteristics; and 4) execution of a nursing validation study. If the project is successful, follow-up projects will be proposed emphasizing dissemination and replication.